Australian Inflation Shows Mixed Trends Across Sectors in Early and Mid-2026

Trimmed Mean Inflation Rises to 3.6% Amid Diverging Sector Costs

"Electricity costs were 21.1% higher than a year ago due to the expiry of Commonwealth and State government rebates." – Ms McCririck, Australian Bureau of Statistics

Official inflation data for the 12 months ending February 2026 and May 2026 reveal varied price movements across different sectors of the Australian economy. The trimmed mean annual inflation figure increased from 3.3% in February to 3.6% in May, with notable divergences in housing, transport, and food costs.

Key Inflation Indicators

The trimmed mean measure excludes items with significant price volatility, such as automotive fuel, to provide an indication of underlying inflation trends.

Sectoral Analysis

Housing

Annual Housing inflation declined from 7.2% in February to 6.5% in May. Throughout both periods, the rise was driven by increases in three categories:

• Electricity: Prices rose 37.0% in the 12 months to February and remained 21.1% higher year-on-year in May. The February increase was attributed to the expiration of Commonwealth and State government electricity rebates. Excluding rebate impacts, electricity prices rose 4.9% in the 12 months to February, reflecting annual price reviews in July 2025.
• New Dwellings: Contributed to housing inflation in both periods.
• Rents: Also contributed to housing inflation in both periods.

Food and Non-Alcoholic Beverages

Annual food inflation rose from 3.1% in February to 3.3% in May. Key drivers included:

• February: Beef and lamb prices were 13% higher year-on-year. Meals out and takeaway prices increased 3.7%.
• May: Meals out and takeaway prices rose 4.0% year-on-year, a key driver of the overall increase.

Transport

Transport inflation shifted from a 0.2% decline in February to a 3.3% increase in May. The primary factor was automotive fuel:

• February: Prices were 7.2% lower year-on-year, with monthly falls of 3.4% in February and 3.2% in January, before the Middle East conflict.
• May: Monthly prices fell 11.9%, following a 7.0% fall in April. These declines were attributed to halved fuel excise and lower world oil prices. Automotive fuel was excluded from the trimmed mean calculation in March, April, and May 2026.

Official Statement

Ms McCririck of the Australian Bureau of Statistics stated that trimmed mean annual inflation rose to 3.6% in the 12 months to May 2026. She noted that electricity costs were 21.1% higher than a year ago due to the expiry of Commonwealth and State government rebates. She also commented that price growth for Transport eased, and that monthly fuel price falls in May reflected halved fuel excise and lower world oil prices.